Conversation

Here’s arguing we’re in for a brutal and long recovery even though the narrative and metagame have converged on a short+deep recovery. I’ve actually been leaning towards short+deep due to the 1920 recession, which followed WW1+Spanish Flu
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I don’t know why the market consensus might be around short+deep but my own reasoning is based on the observation that a lot of the long+brutal has already been logged in the last decade by a lot of people. It’s only the protected buyback-wealthy classes that hadn’t been hit yet.
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The real economy isn’t in great shape, but no actual non-financial capital is being either destroyed or misallocated that wasn’t already in that state. And afaict no new kinds of non-financial wealth worth protecting are suddenly under threat. 🤔
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I have a feeling I may be making some sort of “financialization dualism” error here but I can’t shake the feeling that when a Jenga stack of shaky financial instruments falls, it’s just not as serious as say a hurricane destroying a city or ransomware permanently destroying bits.
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It’s what I call a control failure rather than a plant failure. Bad information washing out. Of course, it can later cause plant failure. That’s the Air France crash pattern. Bad pitot tube data —> autopilot goes nuts —> inexperienced pilot fails to override correctly —> crash.
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So long as you arrest the causal chain before the plane itself crashes, it’s a recoverable error. I’m not sure at what point the financialization control system crashes the economic plane. We’ve caught the pitot tube error at this point.
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Haha no. In the 1920 depression the fed/gov didn’t mess around with extreme unintended policy lag effects like we all just did. The policy response is the key to the length (less=better). This last week’s panic aid drops=long term/deferred pain. We’re not in 2008 anymore Dorothy.
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I made a basic SIR model and it predicts that this will peak in July without mitigation/suppression, which we definitely don't want. If you suppress (lower the R0) then the peak takes even longer to reach. This will stretch into 2021. It's just math.
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